Section 297 & section 372 a
This query is : Resolved
VIVEK SACHDEVA
(Querist)
27 July 2011
Dear Sir,
One company Purchase goods from it's vendors but the payment is made by Group Company ( The company in which directors are interested). Whether Section 297 will be applicable in this case ( As the company is not purchasing goods directly from the group comapny, only payment is made by group company).
Further, Will it attract the provision of Section 372A of Companies Act as well?
Regards,
CA Vivek Sachdeva
One company Purchase goods from it's vendors but the payment is made by Group Company ( The company in which directors are interested). Whether Section 297 will be applicable in this case ( As the company is not purchasing goods directly from the group comapny, only payment is made by group company).
Further, Will it attract the provision of Section 372A of Companies Act as well?
Regards,
CA Vivek Sachdeva
CS SIDDHARTHA BANIK
(Expert)
27 July 2011
Sec 297 says about entering into a contract of sale, purchases or supply of any goods, materials or services etc.
In your case one of your group companies is making payment of your purchases. This is clearly a case of providing of loan. Therefore Sec 297 is not applicable here. But, check the limit of sec 372A is maintaining.
Thanks,
CS Siddhartha Banik
Sec 297 says about entering into a contract of sale, purchases or supply of any goods, materials or services etc.
In your case one of your group companies is making payment of your purchases. This is clearly a case of providing of loan. Therefore Sec 297 is not applicable here. But, check the limit of sec 372A is maintaining.
Thanks,
CS Siddhartha Banik
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